> For the complete documentation index, see [llms.txt](https://docs.alcor.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.alcor.exchange/lsw-liquid-staked-wax/how-it-works.md).

# How it works

**Key Terms**

**-WAX:** The native coin on WAX.

**-LSW**: A reward-bearing token received when staking WAX with Alcor DEX.

**-Staker Multisig:** Account on Alcor holding stakers’ funds.

**Process Overview**

1. **Initiation:** User stakes WAX and deposits it into an Alcor Staking Contract.2. 
2. **Calculation and Minting:** The contract calculates LSW based on WAX´s exchange rate, mints LSW, and sends it to the user's WAX account.
3. **Stake:** Alcor contract uniformly stakes across the top 21 Guilds on WAX using the liquid.alcor account.
4. **Compound:** Alcor constantly claims revenue from WAX DeFi and retakes the profits, ensuring capital efficiency in terms of voting power and resource availability. 

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